Author: Staff Writer

  • Look Back: Vapor in 2021

    Look Back: Vapor in 2021

    Last year was a difficult one for vapor companies as regulation, taxation and flavor bans made their impact on the industry.

    By VV staff

    On Sept. 9, 2020, e-cigarette manufacturers needed to have submitted premarket tobacco product applications (PMTAs) to the U.S. Food and Drug Administration to keep their electronic nicotine-delivery system (ENDS) products on the market. Going into 2021, many applicants hoped to receive marketing approval orders. That didn’t work out. Instead, the FDA rejected the vast majority of applications—many of them for excluding studies that the agency didn’t appear to require at the start of the process.

    By Dec. 31, 2021, the FDA had issued marketing denial orders (MDOs) for most of the more than 6.5 million PMTAs submitted by 500 companies. Only an estimated 80,000 products remain under review and, as of press time, only the Vuse Solo and two tobacco-flavored Solo pods have received a marketing approval order. Many of the applications still under review are “ones submitted by the companies with the largest market shares because they tend to be the largest and most complex applications,” according to Mitch Zeller, head of the FDA’s Center for Tobacco Products (CTP).

    The U.S. Postal Service (USPS) banned the mailing of vapor products in 2021, and Congress started debating a federal nicotine tax, which at press time had been removed from the legislation. Last year, many MDO recipients had those orders stayed by a court or rescinded by the FDA. Withdrawn products returned to market, leaving retailers confused. Misinformation about vaping was widespread throughout the year. Synthetic nicotine and disposable vape pens began to dominate sales and several new cannabinoids came to market. Let’s look back at the top stories of 2021.

    January

    Beverly Hills and Manhattan Beach, both in the Los Angeles area, began to enforce a ban on vapor products, the strictest vaping rules in the U.S.

    Shares in Chinese e-cigarette maker RLX Technology, parent to the RELX brand, jumped 146 percent in their trading debut after raising $1.4 billion in its U.S. initial public offering.

    Following the enactment of smoke-free laws in Paraguay, every South American country banned vaping and smoking in most public places.

    The FDA sent its first warning letters to manufacturers of ENDS products that did not submit PMTAs by the Sept. 9, 2020, deadline.

    Credit: TPB

    February

    Turning Point Brands announced a proposed private offering of $250 million aggregate principal amount of its senior secured notes due 2026.

    The public comment period began for the U.S. Postal Service’s ENDS mailing rules. R.J. Reynolds Vapor Co.’s (RJRV) Vuse Alto began selling nationally in the U.S.

    Utah Senator Mitt Romney pushed for flavored vaping products to be pulled from shelves across the United States.

    March

    The World Health Organization study group on Tobacco Product Regulations recommended prohibiting open systems.

    The litigants in two lawsuits challenging the constitutionality of the FDA’s Deeming Rule for vapor products, Big Time Vapes and Moose Jooce, asked the Supreme Court of the United States (SCOTUS) to take up their cases.

    The Preventing Online Sales of E-Cigarettes to Children (PACT) Act forced many companies to end online sales to U.S. customers. Many went out of business altogether because of the new rules.

    China announced its intent to overhaul rules governing the ENDS market. The news caused a steep drop in the value of RLX Technology shares, from which the company has yet to recover.

    Kate Wang / Credit: RELX

    April

    Virginia became the 16th state and first southern U.S. state to legalize the possession of small amounts of marijuana.

    Charlie’s Holdings, parent to the Charlie’s Chalk Dust and Pacha Mama brands, raised $3 million in a private stock sale.

    American TV personality Phillip Calvin McGraw, also known as Dr. Phil, wrongly blamed the e-cigarette or vaping use-associated lung injury (EVALI) lung illness outbreak on vaping nicotine products. The USPS published its guidance for mailing vaping products in the Federal Register.

    The FDA stated its intent to ban menthol as a characterizing flavor in cigarettes, saying it would exclude e-liquids.

    May

    An estimated 3,000 people visited the Tobacco Plus Expo (TPE) on the opening day of the three-day event, the first vapor trade show since the pandemic began.

    The WHO reasserted its abstinence-only approach to nicotine. The U.S. International Trade Commission (ITC) ruled that Philip Morris International’s IQOS device infringes on two patents owned by BAT subsidiary Reynolds American Inc.

    Meanwhile, a judge ruled that RJRV’s Vuse Solo and Ciro e-cigarettes infringe patents owned by Fuma International. Joining a growing number of U.S. states, New York expressly prohibited Delta-8 THC and other THC isomers derived from hemp.

    The FDA published a list of ENDS products that could be legally marketed in the U.S.

    June

    Poda Holdings launched its “zero cleaning” heat-not-burn (HnB) product after six years of development. SCOTUS denied Big Time Vapes and Moose Joose a request for a writ of certiorari. The German Bundestag signed off on a bill to raise taxes on combustible cigarettes, e-cigarettes and HnB tobacco products.

    An investor filed a class action suit against RLX Technology, claiming the manufacturer overstated its financials and misrepresented potential regulatory risks when it filed its IPO. San Francisco, Connecticut, Washington, D.C., Los Angeles and Canada proposed or enacted flavor bans.

    A study in the U.K. gave homeless people free e-cigarette starter packs. North Carolina settled its lawsuit with Juul Labs for $40 million.

    July

    Vaporesso and FEELM parent, Smoore International Holdings, was the only vaping technology company to make the Forbes 2021 Global 2000 list.

    Australia set maximum fines of up to aus11 million ($8.2 million) for businesses caught selling illegal nicotine vaping products.

    The FDA was accused of issuing unwarranted warning letters and leaving companies off of its list of accepted PMTAs. The agency was also criticized for using poorly functioning PMTA filing software.

    Juul Labs paid $51,000 to buy an entire issue of the American Journal of Health Behavior to publish its own vapor studies and make it publicly available. The town of Brookline, Massachusetts, prohibited the sale of all tobacco-related products to anybody born after Jan. 1, 2000. The Chinese vaping company Aspire Global announced terms for its U.S. IPO—which didn’t happen.

    The Federal Bureau of Investigation and the Drug Enforcement Administration raided the cannabis culture and accessories trade show, CHAMPS, because vendors were giving unauthorized Delta-8 THC product samples. Bidi Vapor parent, Kaival Brands, began trading on the NASDAQ.

    August

    The FDA issued a Refuse to File letter to the JD Nova Group for its estimated 4.5 million PMTAs, which accounted for approximately two-thirds of the total number of PMTA submissions.

    Smok Parent, IVP Technology, considered a Hong Kong IPO—which didn’t happen. The FDA issued the first MDOs covering more than 55,000 products.

    A study found that, contrary to what earlier studies suggested, vaping products are not associated with increased heart attack incidence among people without a history of smoking combustible cigarettes.

    September

    As the PMTA deadline approached, the FDA asked for more time before deciding whether some “e-cigarettes from market leader Juul Labs” and others are appropriate for the protection of public health. Numerous companies received MDOs from the FDA the night before the deadline.

    Vuse became the No. 1 global vaping brand by value share. No product got marketing orders on the court-imposed Sept. 9 deadline; instead, the FDA issued MDOs to more than 130 small companies, including Turning Point Brands, requiring companies to pull an estimated 946,000 products from the market.

    Congress proposed the U.S. Tobacco Tax Equity (TTE) Act, which would tax vaping products the same as combustible cigarettes. The legislation later gets attached to the Build Back Better (BBB) Act. The FDA released its annual National Youth Tobacco Survey (NYTS) showing that youth use of e-cigarettes fell sharply in 2021, the second consecutive year of major declines.

    The FDA said the 2021 NYTS can’t be compared to previous years because Covid-19 caused schools to close and altered testing procedures.  

    October

    Zanoprima Lifesciences announced the commercial production of its SyNic brand of synthetic (S)-nicotine. Turning Point Brands had its MDO rescinded by the FDA because the company did in fact submit newly required studies.

    The FDA’s Fatal Flaw review process was revealed after court documents were released. After more than six months, the USPS finally posted for public inspection its rules for mailing e-cigarettes in the Federal Register.

    The FDA gave the first ENDS marketing approval to RJRV’s Vuse Solo device and two tobacco-flavored pods, which are widely regarded as antique products compared to current vaping offerings.

    The FDA authorized the marketing of four oral tobacco products that are no longer on the market. Ten MDOs were rescinded or stayed by the FDA or in court.

    November

    More details surfaced surrounding the Fatal Flaw review, a simple review in which the reviewer examines the submission to identify whether it contains the necessary types of studies. “The Fatal Flaw review will be limited to determining presence or absence of such studies; it will not evaluate the merits of the studies,” an FDA memorandum states.

    Previously proposed nicotine/vapor tax increases were removed from the BBB Act.

    The Conference of the Parties to the WHO Framework Convention for Tobacco Control held its ninth session, this time virtually.

    The nicotine tax resurfaced in the BBB Act. RJRV settled its Fuma lawsuit two days before the trial was set to start.

    Biden nominated former FDA chief Robert Califf to again lead agency.

    December

    Draft rules governing e-cigarettes and vapor products were issued by China’s tobacco regulator.

    The nicotine tax was again removed from the BBB Act.

    The U.S. Trade Representative upheld the ITC’s finding that Philip Morris International’s IQOS infringes on BAT patents and Altria ended all U.S. sales.

    The Spanish government took control the country’s sales and distribution of vaping products.

    CTP Director Mitch Zeller announced plans to retire from the CTP in April.

    Once the largest chain of vape shops, Avail Vapor sold the majority of its retail locations and closed its remaining stores.

    Turning Point Brands received a USPS exemption for its VaporBeast subsidiary’s vape mail.

    The FDA authorized the marketing of 22nd Century Group’s low-nicotine, combustible filtered cigarettes as modified-risk tobacco products.

    Looking ahead

    The outlook for 2022 is vague at best for vapor. The FDA has a new director, and Zeller is retiring from the CTP, and things can change quickly under new leadership. It’s expected that the FDA will make decisions on the major ENDS brands at some point in the year, and there are still an estimated 44 lawsuits pending over the issuing of MDOs. The industry has already seen numerous vapor-related businesses close, consolidate or be bought out by larger competitors. Experts say that much of the same can be expected in 2022.

    “With the announcement of Zeller stepping down, I think we will continue to see vastly extended approval times for the majority of vapor products still being evaluated by the FDA, especially with open litigation covering many of these products,” said Josh Church, managing director of Roots Holding. “The products that do make it through the approval process will be high-value SKUs to large tobacco product manufacturers and will likely either be bought outright or there will be some agreement in equity share to utilize tobacco’s historic distribution network.”

    Last year left a lot of questions that the industry still needs answers to in 2022. There also probably won’t be many major changes in the vapor market other than continued sales growth in 2022, according to Church. “I think we can all agree that 2021 was a rough year. I believe that this year, we will observe the run out of the mail ban—effects of the PACT Act—on ecommerce,” he said. “That will come alongside continued brick-and-mortar business closures for those who don’t diversify their product offerings. I wouldn’t say 2022 is going to be worse than 2021, but I don’t expect it to change very much either.”

  • Vape Groups Urge Duterte to Sign Latest Vaping Bill

    Vape Groups Urge Duterte to Sign Latest Vaping Bill

    Credit: Mongkolchon

    The Coalition of Asia Pacific Tobacco Harm Reduction Advocates (CAPHRA) has written to Philippine President Rodrigo Duterte asking him to urgently sign the Vaporized Nicotine Products Regulation Act into law.

    Both the Philippine Senate and House of Representatives have ratified the harmonized version of the act, which will regulate the use, manufacture, importation, sale, distribution and promotion of vaping and heated tobacco products. It now awaits the President’s signature or veto.

    “The weight of the scientific evidence shows that potentially thousands of Filipino lives can be saved by making this act the law of the land,” wrote CAPHRA, backed by its expert advisory group and member organizations throughout the Asia Pacific region.

    CAPHRA told Duterte that, when enacted, the legislation will provide 16 million Filipino smokers with the world’s most effective smoking cessation tool, saving the lives and enhancing the health of millions of Filipino smokers and their families, friends, and co-workers.

    “Hundreds of peer-reviewed international scientific studies have found innovative smoke-free products such as e-cigarettes and heated tobacco products to be far less harmful than combustible tobacco and offer the best options to make smokers switch or quit,” wrote Nancy Loucas, executive coordinator of CAPHRA. “The act will ensure the regulation of these products, so that they meet government standards to protect consumers and will contribute revenue, via taxation.”

    The letter said signing the act into law and giving Filipino smokers the option of choosing less harmful alternative nicotine products will create an enduring presidential legacy. It will prove to the world that Duterte is a leader who put the health and well-being of his people, based on science, above the special interests of foreigners.

  • Broughton Boosts Regional Presence With U.S. Subsidiary

    Broughton Boosts Regional Presence With U.S. Subsidiary

    Tony Jones (Photo: Broughton)

    Broughton is establishing a U.S. subsidiary to enhance its presence in the region. Leading the U.S. team will be Tony Jones, who joins Broughton as managing consultant. Jones has extensive experience in toxicology and risk assessment.

    “I am delighted to be spearheading this exciting next stage of the development of Broughton in the U.S. market,” said Jones. “I’m looking forward to introducing the full lifecycle development services offered by the Broughton team to U.S. clients across pharmaceuticals, nicotine and cannabinoids to help the company support their clients to accelerate innovation to market and improve health outcomes.” 

    Along with the appointment of Jones, Broughton has strengthened its consultancy team with several new members.

    Libby Clarke and Carol Beevers have joined the company’s toxicology team. Clarke is a European registered toxicologist and has substantial experience devising toxicology testing strategies and compiling submissions to regulatory bodies, such as the U.S. Food and Drug Administration and Health Canada. Beevers is a genetic toxicology specialist and has contributed to more than 20 papers in peer-reviewed journals. She is a member of the U.K. Committee on Mutagenicity and several international working groups on genotoxicity testing.

    In recognition of the growing importance of behavioral science in regulatory submissions, Broughton has also strengthened its in-house team with the appointment of Oliver Knight-West. Knight-West has conducted multiple behavioral and clinical studies into next-generation nicotine products and pharmaceuticals for dossier submission to the FDA, the U.K. Medicines and Healthcare products Regulatory Agency, and the European Medicines Agency.

    He has published many scientific papers in several highly cited publications.

    To complement the appointment of Paul Hardman in 2021, Malcolm Saxton has joined the chemistry consultancy team. Saxton will help ensure that Broughton remains at the forefront of the industry in terms of novel method development aligned with evolving market and regulatory needs.

    ‘’Since 2006, our focus has always been to help our clients succeed,” said Broughton CEO Chris Allen. “With a passion for enhancing societal health and wellbeing, the establishment of a North American subsidiary is a natural next step to enable us to better partner with our customers in the region.”

  • FDA Submits Menthol Ban to White House for Review

    FDA Submits Menthol Ban to White House for Review

    Credit: New Africa

    The U.S. Food and Drug Administration is a step closer to a complete ban on menthol-flavored cigarettes and cigars.

    The ban is not expected to impact vaping products, although many experts predict a menthol combustible ban could possibly transition some menthol smokers to e-cigarettes. It is predicted to be similar to what happened in the U.K. when it banned menthol cigarettes in 2020.

    Thursday the agency submitted its proposal to the White House’s Office of Management and Budget, according to news reports.

    In 2020, the regulatory agency enacted a “flavor ban” on e-cigarettes because they targeted middle and high school students. Now, public health officials argue banning menthol, the last allowable flavor in cigarettes, will save lives.

    In its proposal, the FDA provides evidence that menthol tobacco products are heavily marketed to racial minorities. The U.S Centers for Disease Control and Prevention reports more than 85-percent of menthol smokers are black, taking a disproportionate toll on their health.

    FDA officials say the proposed menthol ban will still need to be opened to public comment before a final review.

  • Mike Huml Picks 2021’s Best Hardware Products

    Mike Huml Picks 2021’s Best Hardware Products

    Credit: Steam Crave

    There were numerous innovations introduced in the hardware segment last year.

    By Mike Huml

    The year is finally over, and 2021 was a rough one. Not just in terms of the vapor industry but for everybody the world over. After a year like that, it’s important to look back and appreciate the successes and accomplishments despite the challenges faced. In particular, the vapor industry has had to bear the burden of federal and state regulations, supply issues, shipping delays and much more. However, even with these new obstacles and the continued plateauing of new vapor technologies, consumers have mostly still been able to access a wide range of quality vaping products thanks to the hard work of advocates and business owners alike.

    Now, new opportunities for the future arise. Hurdles and challenges inevitably await, but the vapor industry always weathers the storm. There will always be successes and failures, wins and losses, but at the end of the day, it’s important to reflect upon how far vaping has come in such a short time and remember how human innovation transformed the simplest of circuits—a battery and a resistor—into a life-saving product that changed the world of harm reduction.

    Here are my selections for the best vaping products of 2021:

    Best Pod System: The Caliburn G2—UWell

    The Caliburn series of pod systems from UWell has long been a favorite not only for pod vapers but vapers of all levels. Whether as a daily driver or as a backup or portable alternative, the Caliburn has earned a reputation for being a simple, no-hassle device with easy vapor production, accurate flavor reproduction and a killer analog-accurate throat hit. In 2021, UWell released their follow-up to the popular Caliburn G—the Caliburn G2. The Caliburn G2 features all the things vapers have come to love about the Caliburn G plus a few extras to further improve the experience.

    The Caliburn G2 has a larger 750 mAh battery compared to its predecessor’s 690 mAh battery. While this doesn’t provide a huge boost to battery life, any improvement is welcome, especially when it doesn’t translate into a larger device—the Caliburn G2 is virtually the same size as the Caliburn G. Both devices use a USB-C charger for blazing fast charging, and both devices can be charged from empty to full in less than an hour.

    The Caliburn G2 also has a larger window for viewing remaining e-liquid, which is ironically made unnecessary due to the innovative haptic feedback system. When a pod runs empty and the user attempts to take a drag, the Caliburn G vibrates to indicate that a fill is needed. Of course, the larger window is still a welcome upgrade that doesn’t detract from any other features. Additionally, each pod now has an airflow adjustment ring on the bottom to allow for a wider range of airflow settings rather than the two fixed options available with the Caliburn G.

    The Caliburn G2 continues to use mesh technology in the coils for a quick ramp-up time, more even heating and improved flavor. Many pod systems have trouble wicking too fast or too slow, leading to either weak vapor production or spitback and leaking. The Caliburn G2 does not have these issues whatsoever, and that factors into the user experience in a huge way. Ease of use, excellent performance and new refined features all contribute toward the Caliburn G2’s title as the best pod system of 2021.

    Best Starter Kit: Aegis Mini2 and Solo2—Geekvape

    These two kits share their accolade of best starter kit because they are virtually identical in terms of what’s included and performance. Aside from a few aesthetic differences, what sets these mods apart from each other are the batteries. The Mini2 features an internal battery while the Solo2 requires an 18650. That being said, with the advent of pod systems and their dominance over the beginner vaping market, the term “starter kit” has evolved to mean a bundle of products that includes all the necessary hardware to get started with a new setup rather than simply a kit for new users.

    Geekvape has always provided some of the best value when it comes to the intermediate to advanced market, providing hardy and simple devices with a good range of features at a reasonable price point. The Mini2 and Solo2 kits take Geekvape’s well-loved Aegis aesthetic and apply it to a 100 W mod then add in the Geekvape Z subohm tank for a perfect introduction into subohm vaping and cloud chasing.

    These kits naturally come with extra tools and parts as well as a spare replacement coil, but the main attraction of any intermediate kit is the promise that it can provide something that a user can’t find in a pod system. Whether that’s a full day’s battery life, massive clouds of vapor, more customization of the vape experience or an easier way to taper down nicotine levels, many starter kits attempt to provide these features with varying degrees of success.

    Geekvape’s Mini2 and Solo2 can provide all these things with minimal hassle and under $60. The mods themselves are water resistant and dustproof with excellent shock protection in case they’re dropped on the ground. While the Solo2 requires an 18650, both devices can be charged with an included USB-C cable. The menu is simple enough to not incur frustration while also serving to introduce users to the common three-button system.

    The Geekvape Z tank uses top adjustable airflow, rendering it virtually leak proof. It’s also top-filling and performs almost at the level of any rebuildable worth its salt while providing 5.5 mL of juice capacity. Replacement coils are available in two varieties and are readily available from a multitude of vape shops and online retailers.

    There is no single aspect of the Aegis Mini2 or Solo2 that can be singled out as their defining feature. Rather, both kits do everything very well, and that should be the goal of any starter kit. They provide a well-rounded experience that balances features and simplicity, power and size, quality and price point. For anyone wanting to take the next step in vaping, the Aegis Solo2 and Mini2 are the best starter kits of 2021.

    Best Rebuildable: Steam Crave Aromamizer Series

    Rebuildable atomizers, once the gold standard of vaping quality, have humbly been taking a back seat for the past few years. While simpler and more broadly desired devices have stolen the spotlight, the hobbyist vaper niche market still exists backstage. Any “best of” claim will be disputed by the passionate vaper—each has their own hands-down favorite, and nothing can convince them otherwise. However, when taking everything into account from performance and quality to price and availability, the Aromamizer series of atomizers from Steam Crave stands apart from the rest.

    First, the Aromamizer series consists of four different atomizers that range in size from 25 mm to 41 mm in diameter. This means the majority of vapers will be able to find an Aromamizer that perfectly suits their favorite mod. Many varieties are capable of sharing spare parts and build decks, which makes it easy to try new builds without the need for multiple RBAs. Additionally, each Aromamizer can function as either a tank or a dripper. The level of customization is unprecedented.

    Next, the Aromamizer is built to the highest quality standards and performs as well as, if not better than, atomizers at twice the price. Steam Crave is the only notable manufacturer that bridges the gap between the notorious $20 clone and the $200 authentic. Depending on which Aromamizer is chosen, the price hovers between $40 for the 25 mm Supreme V3 and $75 for the 41 mm Titan V2. The Aromamizer design is original to Steam Crave and packs all sorts of features into a single package.

    In addition to interchangeable build decks, the Aromamizers are top-filling with juice flow control and a wide range of airflow options. Being an RDTA, each deck is built like an RDA rather than many dedicated RTAs that wick completely differently than RDAs and therefore are designed with more restrictive decks.

    The latest series of Aromamizers have undergone years of refinement and it definitely shows. Quality and performance aren’t even a question for these RDTAs. But the icing on the cake is price and availability. Many high-end rebuildables are produced at a small scale and can be prohibitively expensive, and because of this, few vendors are willing to risk carrying large quantities of these atomizers for a niche market. It’s too much risk for not enough return, and that can make finding quality rebuildables difficult, even if a vaper is willing to pay a premium.

    So, with that in mind, the Aromamizer series is the best rebuildable of 2021 due to its high quality, perfect performance, level of customization, price point and general availability.

    Best Mod: Hyperion DNA 100C—Lost Vape

    Lost Vape is another longstanding company that breaks from the norm. In a nutshell, this manufacturer is responsible for getting the most mods utilizing Evolv’s DNA boards into the hands of vapers for years. While other companies were copying Evolv’s technology—whether it be variable wattage, regulated subohm vaping or temperature control—Lost Vape simply went to the source and put DNA boards into high-quality mods at reasonable prices. The Hyperion DNA 100C continues this trend, and as a result, Lost Vape has produced the best all-around mod to date.

    The list of features provided by a DNA board is extensive and too long to reproduce here. Evolv has been at the forefront of vaping technology for over a decade, so in general, it’s safe to assume that any feature found on a mod today was pioneered by Evolv. They did it first and probably did it best. Consequently, the Hyperion is a full-featured device with variable wattage, temperature control and the entire gamut of DNA features. That plays a huge role, but it’s not the whole story.

    To put it too simply, the Hyperion is a Geekvape Aegis Solo with the quality bumped up a notch and the inclusion of a DNA board. The C-frame design is hugely popular and functional, allowing for a great asymmetric aesthetic that’s comfortable to hold and allows an infinite number of customization options for the “soft” side. The Hyperion is available with different colors and materials, including carbon fiber, leather and vinyl.

    The Hyperion is also extremely durable, being water resistant, dustproof and shock resistant. It can be powered by a single 18650, 20700 or 21700 battery for maximum battery life and can output up to 100 W of power—more than enough for the general vaping population. The battery can be swapped and charged or charged internally via the USB-C port, which is also used to connect to a PC for firmware updates or to play around with Evolv’s EScribe software.

    Sure, other mods can fire up to 200 W or higher, but for someone looking for a top-of-the-line device that can do it all—and do it modestly—the Hyperion can’t be beaten. It’s the result of years of refinement by Lost Vape that takes a popular and functional design that’s crafted to the highest quality standards and couples it with the best internals on the market in the form of the DNA 100C for a final product that’s a modest size with respectable power that could very well last a lifetime. The Hyperion DNA 100C from Lost Vape is the best overall mod of 2021.

    Best Advanced Mod: Hadron Pro—Steam Crave

    At some point, everybody wants to splurge. Every human eventually wants something out of the ordinary, something bombastic that could very well be overkill, price and practicality be damned. That mid-life crisis of a vaping device is the Hadron Pro from Steam Crave.

    This device certainly has its negatives, from a certain perspective. It’s huge, it’s plain and some assembly is required. However, it uses a DNA 250C board with a 4C LiPo for maximum battery life and a potential 400 W of power. It’s huge for a reason, and that’s the battery that can last for a long while when used at reasonable power levels. Coincidentally, it also gives an excuse to purchase the 35 mm Aromamizer Ragnar, which pairs perfectly with the Hadron Pro.

    Most of what makes the Hadron Pro so great is admittedly the DNA 250C. And while the design is plain, plain can be a good thing when the asking price is approaching $200—the last thing a device that expensive needs is an extreme, polarizing aesthetic. And that large battery previously mentioned? The reason it needs to be installed by the end user is that it is replaceable. Again, a great feature when it comes to an expensive device, as a dead battery isn’t the end of the line for the Hadron Pro. While using four 21700 batteries might seem a better idea to achieve the same effect, the size of such a mod would not only be impractical but unusable.

    None of this is to say that the Hadron Pro is gimmicky—far from it. Every feature provided by the DNA 250C is here, and although the size is a bit unwieldy, it makes for a perfect coffee table mod, and there’s technically nothing that keeps a vaper from bringing the Hadron Pro out and about, provided they have big enough pockets and don’t mind the extra weight.

    For advanced vapers where the pros always outweigh the cons, and impracticality always yields to superior performance, there is no better option: The Hadron Pro is the best advanced mod of 2021.

  • E-Cig Market Gap Between Juul, Vuse Continues to Close

    E-Cig Market Gap Between Juul, Vuse Continues to Close

    The market-share gap between the top-selling U.S. electronic cigarettes has shrunk over the past month with Juul holding about a 4.2-percentage point gap over R.J. Reynolds Vapor Co.’s Vuse.

    The latest Nielsen analysis of convenience store data, covering the four-week period ending Feb. 12, determined Juul was at 37.9percent market share and Vuse at 33.7 percent, according to Winston-Salem Journal.

    There has been a 4- to 4.8-percentage point gap between the two e-cigarettes for the last six Nielsen reports.

    NJoy was at 3.2 percent, up from 3.1 percent in the previous report, while Fontem Ventures’ blu eCigs rose from 2.3 percent to 2.4 percent.

    E-cigarette sales overall have slumped since February 2020, when the Food and Drug Administration implemented its latest round of heightened regulations on the products.

    Those restrictions foremost required manufacturers of cartridge-based e-cigarettes, such as Juul Labs Inc., Reynolds Vapor, NJoy and Fontem, to stop making, distributing and selling “unauthorized flavorings” in February 2021, or risk enforcement actions.

    Goldman Sachs analyst Bonnie Herzog said another factor in the slump is “the impact of e-cigarette market denial orders by the FDA as it continues to work through premarket tobacco applications.”

  • Science Council Creates List of Vaping ‘Junk Science’

    Science Council Creates List of Vaping ‘Junk Science’

    There may be no industry with more misinformation than vaping. The American Council on Science and Health (ACSH) today published a list of many of the vaping and e-cigarette related studies that involved “junk science.”

    Credit: Kraken Images

    “The media reports the results of sloppy vaping research, then quickly forgets them. We do not,” writes Cameron English for the pro-industry advocacy organization founded in 1978. “What follows is a list of many of the low-quality studies that have investigated the alleged health risks of e-cigarette use. We’ll regularly update this catalog of bad studies as necessary.”

    The list has all the recent players, such as vaping’s impact on erectile dysfunction, stroke, bone damage and mental health.

    “The past year has seen the publication of many studies alleging that e-cigarette use (vaping) carries very serious health consequences, everything from depression to erectile dysfunction and higher stroke risk,” English writes. “Each paper generated widespread media coverage, usually one news outlet duplicating the uncritical coverage of the last, giving consumers the false impression that vaping poses a greater health threat than it actually does. When we examined these studies in more detail, we identified their serious flaws and reported them to our readers.”

    English also suggests that health reporters tend to obsess over a topic for a few days then forget it entirely, quickly moving on to the next exaggerated study. This means the public often only hears the information relayed from the faulty study and is never informed that the information isn’t sound.

  • What’s Next for Vapor?

    What’s Next for Vapor?

    The long roller coaster ride for the vapor industry will likely continue for the foreseeable future.

    By Chris Howard and Rich Hill

    It’s been a long and arduous journey since the finalization of the Deeming Rule in 2016. As most of you will recall, this was the moment when we transitioned from operating in an unregulated market to plowing forward under a complicated and onerous regulatory scheme in the blink of an eye. Shortly thereafter, the U.S. Food and Drug Administration announced a renewed prioritization of harm reduction and proclaimed that vapor could play a leading role in that effort.

    Chris Howard
    Chris Howard
    Rich Hill

    Then, as quickly as a bright future for harm reduction blossomed, the lights dimmed, and vapor became the villain in the harm reduction story overnight. In addition to paralyzing propaganda and misplaced demonization by activist groups throughout the U.S., the industry also faced an onslaught of crippling requirements associated with a 10-month window to submit premarket tobacco product applications (PMTAs). Costing millions of dollars, 99 percent of the PMTAs ultimately submitted to the FDA’s Center for Tobacco Products (CTP) were summarily rejected based upon a standard, akin to a clinical cessation trial, that none in the industry expected.

    As of the date of this writing, some of the largest players in the e-liquid space have closed their doors or have moved into yet another risky proposition—synthetic nicotine. Despite the setbacks over the past several years, many still believe reports of vapor’s death as a harm reduction tool are greatly exaggerated. Notwithstanding this cautious optimism, it is clear that 2022 is going to be yet another difficult year for the vapor category.

    Current state as we enter 2022

    As we enter 2022, much of the flavored e-liquid market is gone and may never return. While we have seen marketing orders for first-generation e-cigarettes and tobacco disks that are no longer marketed, we have not seen marketing orders for any modern electronic nicotine-delivery system (ENDS) or oral nicotine products. We have seen a marketing order for a combustible low-nicotine cigarette, along with a reduced exposure order for the same. While litigation continues around the rejected PMTAs, the FDA still lacks a commissioner, and we have no knowledge of who will replace retiring CTP Director Mitch Zeller. Most importantly, other than removing flavors from the market, we have no clear understanding of the FDA’s harm reduction strategy.

    Predicting the future in 2022

    PMTAs. Few question the fact that the CTP was given a Herculean task by the Maryland federal court. Processing, let alone reviewing, 6.5 million PMTAs in a year was unquestionably an impossible requirement. Candidly, the fact that the CTP was able to get the majority through acceptance and filing was a significant achievement. Of course, for most reading this, the outcome was obviously disappointing as nearly all requests for marketing orders for flavored ENDS products were rejected in late 2021. As the various challenges to the marketing denial orders play out over the next year, many hold out hope that the CTP will be found to have violated the Administrative Procedures Act and/or acted arbitrarily or capriciously in its decision-making process.

    Credit: JHVEPhoto

    With respect to those applications that remain pending with the CTP (primarily tobacco and menthol flavors, pod systems and disposable devices), we believe the FDA will issue marketing orders for several tobacco-flavored pods and disposable e-cigarettes in 2022. Assuming the remaining applications otherwise meet the statutory standards, there is little reason for the CTP to deny applications for tobacco-flavored pods, e-liquids and disposables given the evidence that such products are not particularly attractive to youth. That said, we question whether any action will occur before the new FDA commissioner and CTP director are in place and have an opportunity to address policy concerns.

    As for menthol offerings, we anticipate that the FDA will not act until the proposed product standard banning menthol is released. It was interesting to note that a menthol-flavored combustible cigarette with lower nicotine levels was granted an exposure modification order. The CTP’s action may indicate a desire to provide “off-ramps” for combustible menthol cigarette smokers in a world where menthol cigarettes are potentially banned. Ideally, the CTP will grant marketing orders for menthol-flavored ENDS to provide an alternative product for current menthol cigarette smokers. This would provide a potential cessation or maintenance product to the millions of menthol smokers in the U.S.—thus reducing the risk of the formation of black and gray market activities.

    Credit: SYCprod

    Finally, marketing orders for flavored ENDS products seem unlikely in 2022. If the clinical cessation trial/longitudinal cohort study requirement proves to be administratively appropriate, it would seem difficult, if not impossible, that any flavored product will even make it to the review phase with such data for six months to 12 months at a minimum. Even then, it is an open question as to how much and what kind of data will be deemed to be sufficient by the CTP. We see a world where flavored ENDS are once again marketed, but it seems unlikely to occur in the near future.

    Product standards. We have all heard that the CTP intends to issue draft product standards banning both menthol in cigarettes and flavored cigars by April of this year. These purported product standards, along with the recent marketing orders granted for lower nicotine combustible cigarettes, are telling with where the focus of the FDA’s policy stands. The standards appear to demonstrate an agency bent on removing any flavors from combustible tobacco products unless those products cannot create or sustain addiction. We can be assured that the product standards will face a blizzard of regulatory and legal challenges and will likely take many years to implement.

    Synthetic nicotine. A few months ago, synthetic nicotine seemed like the last bastion of flavored ENDS products in the marketplace. While these products currently do not have a regulatory home, we fully expect that the existing legislative efforts will ultimately provide the CTP the authority to regulate synthetic nicotine. Once granted, all regulatory requirements for deemed tobacco products will apply, such as PMTAs. In the unlikely event Congress does not successfully provide such authority, we expect state legislatures to address the issue with prohibitive laws banning synthetic nicotine.

    FDA administration. One wildcard in the mix is the turnover in key personnel at the FDA. In his largely collegial confirmation hearing, the commissioner nominee, Robert Califf, stated that his top two priorities upon confirmation were not tobacco related. Rather, he intends to focus on (a) emergency preparedness and response and (b) patient and consumer protection through “systematic evidence generation” related to medical and food products. While he faced few questions on tobacco-related issues, many skeptics believe his views toward tobacco products are similar to the current administration. Whether he will take a proactive stance toward prioritizing harm reduction is unknown.

    Credit: Neil Lockhart

    Unfortunately, Zeller’s retirement removes a harm reduction proponent. What can we expect in a replacement? In short, the most likely replacement will be a candidate who has solid tobacco control chops and is aligned with the current policy flow against flavored products. We don’t expect to see any novel tobacco control or harm reduction policies (akin to former FDA commissioner Scott Gottlieb’s approach in 2018).

    The roller coaster ride continues

    Unfortunately, it appears that the long roller coaster ride for the vapor industry will continue for the foreseeable future. The good news, if you can call it that, is that the Biden administration has a variety of nontobacco-related issues to address—particularly up to the mid-term elections—which could lessen the likelihood of additional draconian polices imposed on the industry. At this point, it appears that 2022 will be about waiting—waiting for court decisions, waiting for policymakers and waiting for policy decisions.

    We won’t be so naive as to say that things can’t get worse in 2022. That said, if you have made it this far, now certainly doesn’t seem like the time to give up.

    Chris Howard is vice president, general counsel and chief compliance officer, and Rich Hill is compliance director and associate general counsel of E-Alternative Solutions, an independent, family-owned innovator of consumer-centric brands.

  • Vaping Under Fire

    Vaping Under Fire

    Credit: Sanchairat
    Many countries continue to limit access or have outright banned vaping and e-cigarette products.

    By Norm Bour

    As much as we would like to think that vaping and the sale of vape products is universally accepted, that is not the case. The world has changed a lot over the past 10 years, and the medical community’s support has carried some weight, but old customs and rituals die hard. Here is an overview of where the status of vape remains iffy.

    Turkey

    You can use vape products where tobacco is permitted, but the Turkish government is vehemently anti-vape—regardless of the medical documentation that shows the advantages of vaping over combustible cigarettes. Since 2009, President Recep Tayyip Erdogan has led the campaign against all tobacco products, including cigarettes, regardless of their popularity.

    Turkey banned the import of e-cigarettes and related products on Feb. 25, 2020. The ban covers e-cigarettes, accessories, spare parts and solutions (e-liquids) as well as e-cigarette products that use heating or incineration, like electronic hookahs. The country had already banned the sale of electronic cigarettes.

    Erdogan’s aggressive posture has resulted in the seizure of almost 18 million packs of cigarettes in 2020 and 140,000 e-cigarettes. The government offers a hotline for people to call and blow the whistle on illegal products, and 1,500 teams scour the country doing random inspections. For vapers, the online channel remains open, and there are many foreigners who vape in the street without concern.

    India

    With a population of 1.38 billion, India has banned vaping products since 2019. With an estimated 120 million people lighting up, India has the dubious honor of having 12 percent of the world’s cigarette smokers. The country loses about 1 million people per year to tobacco-related illnesses.

    India’s aggressive anti-smoking posture has proven successful as the number of smokers has dropped significantly over the past 20 years. In 2000, it was estimated that one-third of the male population smoked, with 5.7 percent of the female population smoking. A decade later, those numbers had dropped to 23 percent for men and 2.5 percent for women. Currently, an estimated 14 percent of the country’s population smokes.

    With a 28 percent luxury tax on tobacco, there are huge incentives to quitting smoking in India. The bad news is that vaping products are lumped into the tobacco pile, but evidence for the relative safety of e-cigarettes is gaining ground. The anti-vape campaign was geared toward the young smokers, but there may be light at the end of this tunnel.

    Under the guise of preventing potential health risks to the country’s youth, India banned the “import, manufacture, sale, advertisement, storage and distribution” of e-cigarettes in September 2019. However, according to Research and Markets, the Indian e-cigarette market reached a value of $7.8 million in 2018, and it is further predicted to witness a CAGR of 26.4 percent during the forecast period (2019-2024) even with the ban in place.

    There is very little regulatory enforcement for vaping products in India. Vaping products are even being displayed on some store shelves. A few of the biggest paanwalas in the cosmopolitan cities reportedly sell Juul and other high-end hardware. It’s not plainly obvious everywhere, and the specialist “vape only” vendors are all clandestine, according to several sources. Most of the specialists are discerning and do not entertain new customers without a reference from a known customer. 

    Australia and New Zealand

    Australia has been a teeter-totter in terms of vapor regulations. In October of 2021, it declared all nicotine products illegal without a doctor’s prescription. The prescription is intended only for the patient and may not be shared or sold. The sole light at the end of this this tunnel is that nicotine- free products are excluded from this heavy-handed ban.

    Devices and liquids can be sold in all eight territories, though advertising and promotion is legal in some but illegal in others. Spotty monitoring and enforcement have resulted in a lively online trade in vapor products.

    Compared to many countries, the perceived “problems” of youth smoking are modest with percentages of vapers and smokers under 20 percent among different age groups. According to 2021 research from the Australian National University, about 16 percent of current e-cigarette users in Australia are non-smokers who have never inhaled tobacco, while the remaining third are ex-smokers. There are about 400,000 e-cigarette users in Australia.

    While often lumped in with Australia by outsiders, New Zealand has followed its own, more reasonable, path in vapor regulation. The small island country of just 5 million people estimates that 11.6 percent of its population smokes. Its priority is on reducing underage vaping and smoking.

    The Middle East

    Excluding the North African countries sometimes included in the Middle East, this part of the world is home to almost 0.5 billion people and encompasses about 20 percent of the Muslim world. While Islam frowns on tobacco use, many Muslim countries have high smoking rates. While tobacco use has been grudgingly tolerated, vaping was initially disdained, with some countries banning the practice. That is changing, as was evidenced in September 2021 when the World Vape Show was held in Dubai, which has now legalized vaping.

    Tim Phillips, managing director of ECigIntelligence, says the United Arab Emirates is leading the Middle East in vape product sales and access, but considering it started from scratch, the numbers are still small. As tobacco-oriented as this part of the world is, buyers prefer flavored liquids with three out of four sales being sweeter fruit flavors followed by menthol flavors.

    Across the Middle East, the rules are in constant flux. Currently, Kuwait, Jordan, Egypt, Saudi Arabia and Bahrain offer legalized vape, but Qatar and Oman do not. Market intelligence company Mordor Intelligence projects a growth rate of almost 10 percent through 2025 in the regional vapor market.

    In late 2020, a Euromonitor International study found only a very small minority of smokers used e-cigarettes to quit smoking in the Middle East region. Analysts found just 1.8 percent of smokers in the region took up alternatives to conventional cigarettes in 2020. The figure is up from 1.4 percent in 2017 but it remains significantly low when compared to other parts of the world.

    South America/Latin America

    On the other side of the globe, South America’s 433 million people also face an ever-changing landscape of vaping laws. The largest country, Brazil, allows vaping, with some restrictions in enclosed areas. Sales are highly regulated by the Health Surveillance Agency, which closely monitors underage sales, though enforcement of sales and production is weak.

    No. 2 by population, Argentina has banned vaping for a decade and shows no sign of changing its policy. The ban extends to nicotine-free products, and there are virtually no sales, production or importation of e-cigarettes. Ironically, Argentina reportedly accounts for as much as 15 percent of total tobacco consumption in South America.

    Contrary to some of its neighbors, Peru has been open-minded about vaping—to the point where the government appears to turn a blind eye to the practice. With an estimated 2.3 million smokers—just under 10 percent of the population—Peru has no official numbers on the vapers and vape products. It seems the country has higher priorities and has decided to leave vapers alone.

    According to Mordor Intelligence, as enforcement of e-cigarette laws are often open to local authorities, vape shops are often found in places where they are technically illegal in the region. In the entire region only five countries allow the legal sale of e-cigarettes: Chile, Ecuador, Honduras, Paraguay, and Costa Rica.

    Following the recent enactment of smoke-free laws in Paraguay, every South American country has now banned vaping and smoking in most public places. Under Decree No. 4624, approved by Paraguay’s presidency on Dec. 29, consuming lit, heated, or electronic tobacco products is permitted only in uncrowded open air public spaces that are not transit areas for nonsmokers.

    Norm Bour is the founder of VapeMentors and works with vape businesses worldwide. He can be reached at norm@VapeMentors.com

  • State of Euphoria

    State of Euphoria

    Photos courtesy of Demecan and the German Cannabis Association

    Germany’s new government plans to legalize cannabis.

    By Stefanie Rossel

    With Germany’s new government, a coalition of the center-left Social Democrats, the Green party and the liberal Free Democrats, taking office on Dec. 6, 2021, a long-awaited change moved closer to becoming reality. The country, the parties announced in their coalition agreement, will legalize the sale of cannabis to adults—that is, consumers from the age of 18—for recreational purposes. Although no details were mentioned and no timetable was set, the announcement sent cannabis stocks to new heights.

    The Financial Times described the announcement as “game-changing precedent for the global business of growing and selling marijuana” that would be closely watched by other countries. With its proposal, Germany would join a movement of cannabis reform around the world. Canada, Uruguay as well as 19 U.S. states and the District of Columbia have already legalized recreational cannabis. In the European Union, Malta in mid-December became the first country to permit the use and growth of weed for recreational purposes. Sales, however, will remain prohibited.

    After legalization, Germany will be the biggest EU cannabis market by far. For the time being, the recreational consumption of marijuana in the country is not explicitly illegal, but sales, imports and cultivation are prohibited. Germany legalized medicinal cannabis in 2017.

    With further legalization, the government aims to dry out the illegal market, lower criminal justice expenditures and protect public health. According to the German Cannabis Association, illegal marijuana is often contaminated with sand, sugar, glass or spices. Increasingly, synthetic cannabinoids, up to 100 times stronger than natural psychoactive cannabinoids, are used to dilute the weed.

    The proposal also includes preventive measures, such as the creation of facilities where consumers can check cannabis from the black market for harmful additives. Marijuana advertising will be strictly regulated. The coalition has agreed to keep the ban on private cannabis cultivation. Whether foreign nationals will be allowed to buy cannabis in Germany, too, remains unclear. According to the coalition agreement, the measure will be evaluated after four years, especially in terms of youth protection.

    Georg Wurth

    Details Unknown

    What cannabis regulation in Germany will look like exactly remains unclear. The coalition is expected to introduce a cannabis tax; a recent study by Heinrich Heine University Duesseldorf estimates that such a tax could contribute €1.8 billion ($1.14 billion) annually to the state treasury. Legalization would bring in an estimated €4.7 billion per year due to additional revenues from corporate tax, trade tax and value-added tax as well as from savings in prosecution and the judicial system. It could also create 27,000 new jobs, the study found.

    Apart from pharmacies, the licensed dispensaries mentioned in the coalition agreement reportedly might include tobacconist shops and perhaps even dedicated coffee shops as in the Netherlands, which tolerates recreational cannabis for personal consumption. The new government is expected to define thresholds for the content of tetrahydrocannabinol (THC), the psychoactive ingredient in cannabis, in the products to be sold. The government might also review Germany’s traffic laws, which currently allow 1 nanogram of THC per milliliter of blood serum.

    The legalization proposal, long opposed by previous Christian Democrat party-led governments, has triggered a heated debate in Germany. Physicians specializing in addiction treatment warn that it would boost consumption and encourage related issues, such as dependence, depressive and anxiety disorders, psychoses and developmental delays in young people. Meanwhile, law enforcement officials are skeptical that legalization will erase the black market. A tax, they claim, would make legal cannabis significantly more expensive, thus leading to competition between legal and illegal sources.

    Georg Wurth, managing director of the German Cannabis Association, does not share law enforcement’s concerns. “The black market will at least be pushed back,” he says. “Every single euro of revenue that will be generated on the legal market will be retracted from the illicit market, and every percent that moves from the black to the legal market is a progress. I’d rather have a legal and a black market than a 100 percent illegal market. If you take cigarettes as an example, there is also a black market, but there are no plans to prohibit cigarettes in order to rein that in.”

    The right pricing will be decisive for deflating the illegal market, Wurth adds. “All three coalition partners are aware that they shouldn’t overplay their hand if they really want to force back the illegal market. I am confident that they will succeed if they find the right approach at pricing. In Canada, it took about two and a half years until half of the cannabis revenues came from the legal market.”

    Illicit cannabis currently retails at €10 per gram in Germany. Interestingly, this is also the sales price for medicinal cannabis in pharmacies. “Cannabis already is relatively inexpensive in Germany,” says Adrian Fischer, co-founder and managing director of Demecan, which supplies medicinal cannabis. “We presume that consumers will be willing to pay a higher price for legal cannabis for recreational purposes that has a better quality than illegal weed, but the price shouldn’t be much higher than €10. In addition, it has to be guaranteed that there are a sufficient number of points of sale for marijuana. If a consumer must drive 50 kilometers to the next legal dispensary, he is more likely to stick with his dealer round the corner.” If legal cannabis is priced competitively, Fischer forecasts that the German marijuana market will be worth €5 billion in five years.

    While the German Cannabis Organization opposes a limit on the THC content, Fischer suggests linking it to certain age limits, as with alcohol. In Germany, drinks with a low alcohol content, such as beer or wine, can be legally purchased from the age of 16 while liquor drinkers have to wait until they turn 18. “Similarly, cannabis with a lower THC content could be made available for 18-year-olds and with a higher THC content for 21-year-olds,” says Wurth.

    Adrian Fischer

    Important Considerations

    The German Cannabis Organization believes the coalition should consider four aspects in shaping regulation. For starters, it should permit private cultivation for personal consumption. “In other countries that have legalized marijuana, such as Uruguay and some U.S. states, this is part of the law,” says Wurth.

    Traffic laws are another issue. “Presently, limiting values and criminal proceedings are extremely strict. Cannabis users may lose their driver’s license even though they did not drive stoned, only because they have remainders of cannabis in their blood from consumption days ago that don’t have any effect on their driving behavior anymore,” says Wurth.

    He also insists on an amnesty for the cannabis users who are currently listed as criminal offenders. “Their entries have to be deleted,” says Wurth. “In the U.S. states where marijuana is legal, this is regularly being done.”

    Lastly, the sale of legal cannabis should remain restricted to specialist shops, according to the German Cannabis Organization. This would also guarantee better youth protection.

    However, neither the legalization of cannabis for adults nor prohibition can prevent marijuana consumption among youths, cautions Wurth. “Legalization would nevertheless have a positive impact on youths, even though it cannot principally prevent youth consumption,” he says. “Youths are more susceptible to prevention measures, hence the latter should be stepped up significantly and reformed.

    “Currently, police give preventive lessons in schools. They tend to get the message across that youths shouldn’t touch cannabis or else they would end up in the gutter, lose their driver’s licenses, etc. I hope that with the legalization there will also be more investment in better education and credible prevention measures so that youths seek drug counselling help earlier.”

    If youths do consume cannabis, Wurth adds, it is safer if their older friends or siblings bring them legal weed from a licensed dispensary rather than potentially contaminated marijuana from a street dealer as is the case now.

    Companies currently supplying medical cannabis say they will be able to scale up production rapidly when Germany legalizes recreational cannabis.

    Gold Rush

    The German illegal marijuana market is estimated at about 400 tons, most of which is imported from Morocco. Since Germany is a signatory to the 1961 United Nations Single Convention On Narcotic Drugs, the country will not be allowed to import or export cannabis for recreational purposes once the substance has been legalized. This means the coalition will either have to negotiate new conditions or stipulate that all cultivation has to take place in Germany.

    Presently, only medicinal cannabis is grown in Germany. That business is controlled by three companies: Tilray, Aurora and Demecan. Under supervision of the state-owned cannabis agency, they jointly cultivate 2.6 tons of medicinal cannabis annually to cater to a market that is estimated at 12 tons to 15 tons per year, with demand increasing, according to Fischer. Due to the strict rules and standards, the companies grow the plants in hermetically sealed buildings, with product stored in high-security vaults. The first domestic crop reached pharmacies only last summer; a large amount of medicinal cannabis is still imported.

    After legalization of recreational cannabis, manufacturers say they will be able to quickly expand production. Demecan has opened a center for medicinal cannabis in Ebersbach and recently finalized construction of Europe’s largest indoor marijuana production site. It presently has the capacity to produce 1 ton of medicinal cannabis but can supply 50 percent more at short notice, according to Fischer. “Within a year, we could step up capacity to 4 tons and in the mid-term to 10 tons per year. We are prepared to cater to growing demand. Our aim is to cultivate life quality and to ensure patient care, hence it is important to us that legalization of recreational cannabis doesn’t happen at the expense of patients. Therefore, we have built large production capacities to cater to both markets.”

    The three providers of medicinal cannabis alone will nevertheless not be able to meet the demand for recreational cannabis, he admits. “To reach this target, legislature must tender licenses for the cultivation of marijuana in Germany relatively quickly and right on time before the actual legalization.”

    With medicinal cannabis being a medicine, all aspects of production are subject to the narcotics act and must be compliant with good manufacturing practices and good agricultural and collection practices guidelines. A relaxation of production regulations for the cultivation of recreational weed, Fischer says, could contribute to less costly production.

    Medicinal cannabis has been legal in Germany since 2017

    Role Models

    Wurth expects it to take another one or two years until the law takes effect—and even longer until the first licenses will be allocated, cultivation gets started and the first shops open. “The quickest part of such a law would be the decriminalization of consumers. The U.S. have shown that this can happen immediately.”

    In shaping the law, he says, Germany has several role models it could draw upon. “The Netherlands are no example of a legalized market as the coffee shops are only tolerated, and supply is not regulated, so that criminal structures have emerged like everywhere else. But the coffee shops are a good example of allowing consumption on-site, which is not the case in most other countries that have legalized marijuana. As for points of sale, Germany should look to Canada and the U.S.—licensed specialist shops in a limited number; no access for youths; exact declaration of the products, their origins and their CBD and THC contents. Uruguay allows cultivation for personal use; people can even join grower communities to cultivate their weed or have it cultivated.”

    In the end, the legalization of cannabis in Germany might go more smoothly, critics fear. In February 2021, the Cato Institute published a study on the legalization of marijuana by some U.S. states. It found that both proponents and opponents overstated their cases. Except for tax revenues, which exceeded some expectations, the report says state legalizations have mainly had minor effects.